THE COOPERATIVE RESEARCH CENTRE CONFERENCE – AUSTRALIA 2040

It’s a great pleasure to be here today to celebrate with you 25 years of the CRC program, and to talk about the future of the program and Australia’s national innovation system.

I don’t need to tell you about the achievements of the CRC program.

If you didn’t know before you came to this conference about long wear contact lenses, the 3D printed jet engine, tooth mousse or Australian innovation in monitoring the stability of a longwall mine face – you know about them now.

I have been invited to talk about Labor’s approach to innovation, science and research policy.

Many of you will have heard me make similar remarks before.

I make no apologies for repeating the sentiments I’ve expressed at events like this in the past.

Inconsistency is, I hope, something I cannot be accused of here.

On Labor’s behalf, I have consistently advocated increased investment in science, research and innovation.

In our last period in office, Labor increased Commonwealth investment in these areas by 43 per cent.

Now Bill Shorten has upped the ante.

In his Budget Reply speech, Bill set an ambition for the nation – universities, industry, the people and the Parliament – to devote 3 per cent of our GDP to R&D by the end of the next decade.

Achieving this goal requires a sustained commitment; a consistent, coherent, long-term plan. That’s what this country needs.

As we prepare for the next election, Labor has made clear that we will go to the people with a vision for a prosperous Australia, now and into the future.

We will go to them with a plan for building the jobs of the future, and equipping the next generation with the skills to compete in a complex world.

And there’s every chance it won’t be long before we have the chance to put our case to the Australian people.

We all know there has been speculation about an early election.

I don’t know more than the next person about what’s in Tony Abbott’s mind.

But what I can tell you is that the average duration of first term parliaments since World War II is one year and nine months.

And I can also tell you that whenever an election is called, Labor will be ready.

We will be ready to make our case – as we have been doing all year.

Labor’s case is a positive one. You will have heard Bill Shorten talking about this in his Budget Reply.

Those of you who pay attention to politics will have heard Chris Bowen, Jason Clare, Ed Husic and others speaking with passion and commitment about the pace of technological development and what it means for Australia’s future.

STEM and the Jobs of the Future

Joe Hockey said in his Budget speech that people often ask him where the jobs of the future will come from.

And then he delivered a Budget that yet again cut funding for the CRC program, and for university research.

The Government even cut funding for their own Entrepreneurship Infrastructure Program – already a pale imitation of Labor’s carefully designed industry-facing measures.

We in Labor know that the jobs of the future are going to be driven by science, technology, engineering and maths –STEM.

We know that three out of every four of the fastest-growing occupations in our economy will require STEM literacy.

And we know that other countries are lifting their sights and their investment in STEM to create the jobs of the future.

Australia is in a global race for high-wage, high-skill jobs and industries.

We cannot simply rely on our existing so-called comparative advantage – we need to build competitive advantage in new industries if we are going to sustain our prosperity into the future.

It’s not just about getting more people into lab coats – although there is nothing wrong with that.

The high wage, high skill jobs of the future that rely on STEM literacy span everything from health workers to technicians and electricians to plumbers and mechanics.

That’s why Bill announced in the Budget Reply that Labor will:

Set an R&D target of 3 per cent of GDP.

Foster the new essential literacy of the 21st century – the digital language of coding – across the school curriculum.

Boost the skills of 25,000 existing teachers and train 25,000 new teachers with STEM skills, to ensure our kids are being taught STEM by teachers with the knowledge and confidence to inspire them.

Provide an incentive via HECS-free degree scholarships for more talented students to study STEM degrees – with a particular focus of encouraging women into degrees where they are currently under-represented, and supporting students from disadvantaged and non-traditional backgrounds to pursue the dream of a STEM career.

Bill also announced that Labor will establish a new $500 million Smart Investment Fund to back-in great Australian ideas.

And we’ll work with the banks and finance industry to establish a partial guarantee scheme, StartUp Finance, to address the gap in access to capital that too often prevents Australian entrepreneurs from being able to turn their great ideas into good businesses.

These announcements represent the first tranche of Labor’s innovation policy – a starting point in the process of rebuilding the comprehensive innovation policy that the Abbott Government has been systematically dismantling.

Why STEM?

Labor’s announcements have been criticised in some quarters by people who think we already have enough STEM graduates – people who think that we can measure over- or under-supply in the job market over the next decade or two by looking at the short-term employment outcomes of recent science graduates.

I suggest that these people need to get out and speak to those who actually do the hiring.

The Business Council of Australia and the Australian Industry Group have been reporting skills shortages and urgently calling for a focus on improving STEM-literacy across the workforce.

The Chief Scientist released his major report on STEM in September, calling on policy-makers to take steps to secure the pipeline of STEM skills across the education system and the economy.

More recently, his office released a summary of a Deloitte Access Economics survey of employers that found that almost half of those surveyed expected their need for STEM professionals, technicians and tradespeople to increase over the next five to ten years.

More than 40 per cent of employers who responded to the question reported difficulty filling technician and trades worker roles, while almost a third reported difficulty in recruiting STEM graduates and one in five said there was a shortage of such graduates.

And it just takes a quick glance at the Department of Immigration’s skills shortage list to see that they agree – engineers of every type feature heavily.

We’re not just talking about contemporary skills here.

Young people in Year 12 today will work for 50 years or more.

They need skills for new industries; new technologies yet to be deployed.

Lifting Australia’s Performance

But I’m sure I’m preaching to the converted in this room when I talk about the importance of STEM.

And I’m sure I’m also preaching to the converted when I speak about the need for a suite of measures to build a strong national innovation system.

These measures are needed to encourage and support investment in science, research, translation and commercialisation across the economy.

Bill’s ambition – that the nation devote 3 per cent of our GDP to R&D by 2030 – is a big goal.

Achieving it will require unprecedented levels of investment and collaboration.

Government needs to do its bit, but so does industry.

Business investment in R&D is the statistic in which Australia lags badly behind our international competitors. This must change.

That’s one reason I have been so concerned about the Liberals’ attempts to cut the R&D Tax Incentive.

But there in no single solution. We cannot rely only on the tax incentive to incentivise business R&D.

If we are going to change the culture of business in this country, and if we are going to build new businesses in new industries, we need to be proactive in fostering collaboration with universities and publicly-funded research agencies.

We need to be proactive in getting researchers into business.

CRCs play a vital role here.

As the Miles Review notes, the program’s current objective is:

To deliver significant economic, environmental and social benefits to Australia by supporting end-user driven research partnerships between publicly funded researchers and end-users to address clearly articulated, major challenges that require medium to long-term collaborative efforts.

In pursuing this objective, CRCs improve the skills of Australia’s workforce; expand our research capacity; increase innovation across business, government and the community sector; and boost national and international collaboration.

And they change the culture of research organisations and industry partners.

This is a long journey. But whenever I speak with CRCs – which I have been doing for about 20 years – this is one of the critical things they talk about: culture.

Nowhere is building a culture of collaboration more important than in our young researchers.

The vital role CRCs play in training PhDs and giving them practical exposure to industry cannot be over-stated.

Over the last 25 years, 3600 PhD graduates have come through CRCs.

Between 2003-04 and 2012-13, an incredible 87 per cent of the 2008 PhD graduates were subsequently employed by end-users.

Public Good

At this point, I should note that PhD students who train with CRCs are not just STEM researchers.

As Minister, I was always keen to emphasise the contribution that the humanities and social sciences can make to delivering end-user goals.

And by end-user, I do not just mean industry or commercial businesses.

Reintroducing the public good objective to the CRC program – something I did in 2008 – was not an administrative error.

As you have probably seen, I strongly disagree with the Miles Review’s conclusions:

that “the purpose of the programme has become muddied”; and

that ‘end-user driven research’ is too broad an objective.

Indeed, the Review’s final recommendation – which essentially says that other portfolios should fund CRCs in their areas of interest – acknowledges that the CRC model works for a wide range of end-users.

And the fact is that our economy – not only our society or environment – benefits from the work of so-called public good CRCs.

Improving the evidence base to support people living with autism, for example, might enable thousands of people to move from welfare to work.

The prevention and management of bushfires and other natural disasters could save our economy millions of dollars in reconstruction expenses.

I am extremely concerned about this Government’s attempts to narrow the scope of the CRC program to fit in with the Minister’s stunted Growth Centres.

From everything we’ve heard, the Growth Centre model is falling at the first hurdle.

Industry is reluctant to engage, because they are sick of all the chopping and changing.

The Critical Role of CRCs

Which brings me to my final point – and that is about the CRC program and its role in the Australian innovation system.

When a program is 25 years old – older, indeed, than many political staffers – some people are bound to think that it’s time for a shake-up.

I see it differently.

The CRC program has proven its worth.

Business and industry understand the program. They understand how it works and how to engage.

That doesn’t mean there’s no room for improvement.

Over the last 25 years, lessons have been learned and applied, and we’ve seen continuous improvement in CRC administration and outcomes.

And we’ve seen a three-to-one return on investment.

So I am pleased that the review and Minister Macfarlane’s response have rejected the National Commission of Audit’s recommendation that the CRC program be abolished.

Now I can only hope that Mr Macfarlane is realising the error of his ways in rushing in to demolish Labor’s suite of measures that complemented CRCs in building collaboration across the innovation system.

What Labor understands is that there are no silver bullets.

There is no one program that can address all the challenges we face in building a stronger, more connected innovation system – one that supports all the necessary elements from basic research to translation and commercialisation to growing the capacity of Australia’s managers to foster innovation in their businesses.

Our approach – Labor’s approach – remains consistent.

We remain committed to delivering a suite of measures to build a strong national innovation system – from building our STEM skills base to increasing business R&D.

We remain committed to doing what it takes to equip our nation to win the global competition for skills, for investment and for high wage jobs.

Because we understand that this is the only way to maintain Australia’s prosperity into the future.